EVM EVM Variance Analysis and Interpretation 1 — Questions and Answers
Question 1: What does a negative Cost Variance (CV) indicate in EVM?
- The project is ahead of schedule
- The project has spent more than the earned value (Correct answer)
- The project is under budget
- The project has completed more work than planned
Correct answer: The project has spent more than the earned value
A negative CV (EV - AC < 0) means actual costs exceed earned value, indicating the project is experiencing a cost overrun.
Question 2: What is the correct formula for Schedule Variance (SV)?
- SV = AC - PV
- SV = BAC - EAC
- SV = EV - PV (Correct answer)
- SV = EV - AC
Correct answer: SV = EV - PV
Schedule Variance is calculated as EV minus PV, measuring the difference between work accomplished and work planned to be accomplished.
Question 3: A project has an Earned Value of $400,000 and a Planned Value of $500,000. What is the Schedule Variance?
- +$100,000
- -$100,000 (Correct answer)
- $900,000
- $0
Correct answer: -$100,000
SV = EV - PV = $400,000 - $500,000 = -$100,000, indicating the project is behind schedule by $100,000 worth of work.
Question 4: What does Variance at Completion (VAC) represent?
- The difference between planned and actual schedule
- The expected cost overrun or underrun at project completion (Correct answer)
- The total earned value of the project to date
- The remaining authorized budget for the project
Correct answer: The expected cost overrun or underrun at project completion
VAC = BAC - EAC, representing the projected difference between the original budget and the estimated final cost of the project.
Question 5: A positive Schedule Variance (SV) indicates which of the following about a project?
- The project is over budget
- The project is behind schedule
- The project is ahead of schedule (Correct answer)
- The project has a favorable cost position
Correct answer: The project is ahead of schedule
A positive SV (EV > PV) means more work was accomplished than planned at the data date, indicating the project is ahead of schedule.
Question 6: What is the correct formula for Variance at Completion (VAC)?
- VAC = EV - AC
- VAC = EV - PV
- VAC = BAC - EAC (Correct answer)
- VAC = BAC - AC
Correct answer: VAC = BAC - EAC
VAC = BAC - EAC; a negative VAC result indicates a predicted cost overrun at project completion.
Question 7: Which of the following best describes a 'favorable' variance in an EVM context?
- The project is spending exactly as planned
- Actual performance is better than what was planned (Correct answer)
- The project has a zero variance on all metrics
- All variances are within 10% of the baseline
Correct answer: Actual performance is better than what was planned
A favorable variance occurs when actual performance exceeds the plan, such as a positive CV (under budget) or a positive SV (ahead of schedule).
EVM EVM Variance Analysis and Interpretation 1
What does a negative Cost Variance (CV) indicate in EVM?